T-Mobile's offering, dubbed “Simple Choice,” makes the company the first of the big four US-based carriers to drop one-year or two-year contracts in favor of purely month-to-month-based arrangements. T-Mobile outlined the new plan on its website Monday. Customers can now sign up for a month-to-month package with unlimited texting and voice, plus 500MB of data for $50 per month. (The price increases to $60 for 2GB and higher.)

Customers can bring their own device or can pay an additional fee to buy a new phone—essentially shifting the carrier subsidy entirely to the consumer. For example, a new Samsung Galaxy S III requires a purchase price of $110 (but retails for $550) with an additional $16 fee for two years.

Presumably, on a month-to-month contract, if a customer wanted to switch carriers before the two years, she would have to either buyout the remainder of the contract or return the phone. (Update: Indeed, as Ars reader Mitch Brown points out, that's correct as stated in company policy.) T-Mobile spokesperson Heidi Merz said that the company was “unable to accommodate [Ars’] request today but will be in touch when we can.”

It’s likely the company is staying mum in light of its New York launch event planned for Tuesday. Earlier this year, T-Mobile began declaring itself the “uncarrier.” It gave customers the option of going to a purely prepaid model or sticking with an old-school contract. In early 2013, T-Mobile had nearly two million iPhones using its network.

Prepaid quickly rising

As Ars reported last year, prepaid customers are rapidly growing across America, and the country is starting to look more and more like foreign mobile markets. In May 2012, 25 percent of US mobile phone users (including this author) were prepaid customers, a record high.

Analysts remain skeptical that T-Mobile can lure new users over to its network. As a former T-Mobile customer, I’d be an ideal customer—but I still only pay $45 per month for unlimited text/voice and 2GB of data on Straight Talk, a mobile virtual network operator (MVNO) of AT&T. For now, T-Mobile’s new plan isn’t quite competitive with that.

“Consumers are used to key price points on hardware: free, $99, and $199,” Hugues De La Verne, an analyst with Gartner Research, told Ars. “T-Mobile does not have the advertising budgets nor marketing muscle to completely change consumer behavior overnight. Such an abrupt change will result in confusion by many users unless it is accompanied by a significant consumer education plan along with a significant savings versus more traditional subsidized operator models.”

Similarly, other analysts felt that while such a move will eventually come to the rest of the American mobile market, the two large traditional carriers (Verizon and AT&T) would be slow to respond. Simply put, they don’t need to—they’re already on top.

“Being in last place, [T-Mobile] has nothing to lose so they have the freedom to experiment like this,” said Chris Silva, an analyst with the Altimeter Group. “Now having MetroPCS and foreign ownership, they don't look like a traditional American-owned company. There's no doubt that the rest of the US will catch up with this model as we have more devices per person. It's getting messy for the multi-device user. I'd love to see more of this, but I don't expect to see more of this in the next 18 to 24 months. Beyond that we can dream.”

Assuming you're off contract and can live with your current phone, moving to T-Mobile should be dramatically cheaper.

If they have service in your area. T-mobile's service out in the boonies drops off dramaticlly in a lot of area's in the US compared to the top 3. I'd love to have T-mobile, but they don't seem to have towers out in this area of west Texas. So I'm stuck with Sprint, AT&T, or Verizon.

I use the iPhone 4S on T-Mobile right now (in San Francisco), and my wife uses an iPhone 5. For both of us, service is rather flaky. Frequent drops to EDGE speeds all along major thoroughfares. Unless they're going to turn on a few hundred towers between now and tomorrow, they better not announce iPhone support. (Well, at least not with immediate availability.)

EDIT: I should point out, I get plenty of 3G, and it's nice and fast...but also, sometimes it just randomly drops to EDGE. Most often while riding in a car/bus.

It's a shame Straight Talk no longer offers the AT&T-compatible SIM, only the T-Mobile-compatible SIM now. Hopefully all this work means T-Mobile will be a bit more compatible with unlocked/AT&T phones for 3G and up service.

It's a shame Straight Talk no longer offers the AT&T-compatible SIM, only the T-Mobile-compatible SIM now. Hopefully all this work means T-Mobile will be a bit more compatible with unlocked/AT&T phones for 3G and up service.

It's a shame Straight Talk no longer offers the AT&T-compatible SIM, only the T-Mobile-compatible SIM now. Hopefully all this work means T-Mobile will be a bit more compatible with unlocked/AT&T phones for 3G and up service.

I've been thinking of switching to T-Mobile and just buying Nexus phones when my Verizon contract runs out, and I was only considering their old price plans. These new prices pretty much guarantee I'm running from Verizon as soon as I can.

I don't think T-Mobile or the press truly understands that a lot of former T-Mobile customers (myself for 9 years) dropped them not because of data, but because of VOICE. Their coverage is terrible compared to others. I switched to MetroPCS and my phone works in more remote places than it did with T-Mobile.

Assuming you're off contract and can live with your current phone, moving to T-Mobile should be dramatically cheaper.

Yeah, it seems what this does is basically allows you to get a new phone less often and pocket the savings yourself, something the subsidized hardware model wasn't good at. The question is, has innovation in the phone business slowed down enough that a significant number of smartphone users will want to use hardware that is 3+ years old? As it stands today, I'm not sure. In the iPhone world, the only phones that people would have completely paid off by now are the 3GS and maybe the iPhone 4, both of which are markedly inferior to the iPhone 5. I'd assume the situation is even worse in the Android world with Androids from that time period unable to run modern versions of Android and apps written with modern APIs. Nevertheless, as innovation continues to slow down as the market matures, this could get more and more popular. I know today it is common to use PCs that are 5+ years old, so the same could be true of phones in the future.

I don't think T-Mobile or the press truly understands that a lot of former T-Mobile customers (myself for 9 years) dropped them not because of data, but because of VOICE. Their coverage is terrible compared to others. I switched to MetroPCS and my phone works in more remote places than it did with T-Mobile.

Assuming you're off contract and can live with your current phone, moving to T-Mobile should be dramatically cheaper.

Yeah, it seems what this does is basically allows you to get a new phone less often and pocket the savings yourself, something the subsidized hardware model wasn't good at. The question is, has innovation in the phone business slowed down enough that a significant number of smartphone users will want to use hardware that is 3+ years old? As it stands today, I'm not sure. In the iPhone world, the only phones that people would have completely paid off by now are the 3GS and maybe the iPhone 4, both of which are markedly inferior to the iPhone 5.

In theory the earliest iPhone 4Ses sold will be off contract by this Fall.

That phone is sufficiently good (my wife and sister-in-law both have them) that I don't think they feel the need to upgrade to a 5, at all.

Quote:

I'd assume the situation is even worse in the Android world with Androids from that time period unable to run modern versions of Android and apps written with modern APIs. Nevertheless, as innovation continues to slow down as the market matures, this could get more and more popular. I know today it is common to use PCs that are 5+ years old, so the same could be true of phones in the future.

This year might be the year it starts happening.

Heck, I know people still using venerable 2009 iPhone 3GS! They could buy a used iPhone 4S, today, for $300 and switch to T-Mobile and save a bunch of cash.

Assuming you're off contract and can live with your current phone, moving to T-Mobile should be dramatically cheaper.

Fair enough. But my wife and I currently have two Straight Talk phones at $90 (2 x $45, both with 2GB).

Actually, it's slightly better than the OP makes it out to be - Every T-mobile plan now comes with 500MB high speed data standard. Then you are just buying extra high speed data with the data addon. All data past the softcap gets delivered at EDGE-like speeds. So, 2.5GB high speed data + unlimited low speed isn't so bad.

Check the plan details, if you don't believe me. Granted, it's still $5 more per line, and T-Mobile's coverage is not as extensive as AT&T.

Fair enough. But my wife and I currently have two Straight Talk phones at $90 (2 x $45, both with 2GB).

We've got three lines, two with unlimited 4G data and one that's just a dumbphone (house phone replacement) and we're paying $90/mo right now on one of the now-defunct Value plans, compared to $130/mo if we switched. Granted it's not unlimited minutes or text, but we don't really text and 1000 minutes has always been at least 3x as many as we'd ever use, so may as well be. It would've been nice if the non-unlimited options had been kept to keep costs down further, but now it looks like the only choice is in how much data you want. Great for a lot of users, but not so much us little guys.

Assuming you're off contract and can live with your current phone, moving to T-Mobile should be dramatically cheaper.

Fair enough. But my wife and I currently have two Straight Talk phones at $90 (2 x $45, both with 2GB).

It's close though, 2x2GB for $90 vs. 2x2.5GB for $100.

Currently I'm on ST @$45, wife is on the $30 plan (which basically has no data), so that's $75. For $80 we could both get 500MB (which is more than I usually use) or for $90 I could bump one phone up to 2.5GB. It's at least competitive... I have no idea what taxes and fees are on TMO. The $45 ST plan comes to something like $48.50.

One has to wonder why AT&T is wholesaling their stuff so cheaply but offering nothing approaching that pricing direct.

It's a shame Straight Talk no longer offers the AT&T-compatible SIM, only the T-Mobile-compatible SIM now. Hopefully all this work means T-Mobile will be a bit more compatible with unlocked/AT&T phones for 3G and up service.

Isn't this what they used to call their "Value Plans" or something like that?

Thats what I have had for over a year now. Paying $100 (plus fees and insurance) for two lines with unlimited talk/text and 2GB high speed data. Got the phones on sale ($200 off each phone) and then the rest is paid of with monthly installments over 18 months. Even with the monthly installments my bill is about $20 a month cheaper than what I paid Verizon, and once the installments are done it will be more like $60 cheaper.

Assuming you're off contract and can live with your current phone, moving to T-Mobile should be dramatically cheaper.

If they have service in your area. T-mobile's service out in the boonies drops off dramaticlly in a lot of area's in the US compared to the top 3. I'd love to have T-mobile, but they don't seem to have towers out in this area of west Texas. So I'm stuck with Sprint, AT&T, or Verizon.

People are impressed by their prices. But those prices are because their network is marginal or non existent in many places. So basically, they're buying customers with these prices. If they ever become competitive in total service, those prices will rise.

Dammit T-Mobile, would you just increase your coverage out here in Western New York beyond the borders of Buffalo? If I can go between Buffalo, Lockport, and Rochester without having to drop to Edge speeds, I'd switch to you guys in an instant from Straight Talk.

I have an iPhone 4. I experimented with going to T mobile only to find that their network did not support 3G on iPhones. I was not told this when I switched; according to the manager I spoke to later when I could only get the Edge network, there is something about the iPhone 3 and 4's that can't get 3G. If I'd had an iPhone 5, I'd have been fine.

I didn't want an iPhone 5; I bought my phone from Apple unlocked, and need to keep it awhile to get my money's worth from the device. So I went back to AT&T before the grace period expired, remaining one of the few iPhone users left with unlimited data.

I have StraightTalk and it's $45 for unlimited calls, text, and data. I'm not sure where you got the 2GB limit from, unless that's when they start secretly throttling (only because AT&T does that with their unlimited).

The only data limit they offer is (for those who don't really need it) which is $30 for 30MB of data (otherwise unlimited calls and text).

What sucks, however, is that those poor sods who purchased the existing "Value" plans still have to ride out their 2 year contracts (or pay $200 per line in ETF's)... despite having no subsidies on their accounts, or having any real price advantage over the new "contract free" plans

Presumably, on a month-to-month contract, if a customer wanted to switch carriers before the two years, she would have to either buyout the remainder of the contract or return the phone.

How does that differs to current contract arrangements. You can terminate early too, and if you do, you pay the termination charge which covers the remaining cost of the phone as well. The above sounds the same to me? Maybe it is just 'cheaper' form of current termination charge?

Nice, it looks like the USA might finally be catching up with the 3rd world countries! Perhaps when I get back to the states in the future I'll actually be able to afford cell service. It only costs me about 5 bucks a month or less to talk (i rarely use data) on my phone now whenever I want - you'd think the "world's leader" wouldn't also have the world highest cellular fees (per a previous Ars article).

Presumably, on a month-to-month contract, if a customer wanted to switch carriers before the two years, she would have to either buyout the remainder of the contract or return the phone.

How does that differs to current contract arrangements. You can terminate early too, and if you do, you pay the termination charge which covers the remaining cost of the phone as well. The above sounds the same to me? Maybe it is just 'cheaper' form of current termination charge?

After two years you can continue to use your phone and your bill goes down $16 a month. On current contracts you continue to pay extra. It's incentive to wait to upgrade.

It's really not a huge change in price structure. People are just used to the phone cost being hidden. I've always bought my phones straight out. You pay for it one way or the other anyways.

It's easier to compare bang for buck too when you shop at full price. When we went phone shopping here a bit ago, we settled on the Galaxy S Blaze as a reasonable compromise @ $350 a pop. Sure the S3 was prettier, but the cost difference just wasn't justified.

I've been a sprint customer for 13 years with limited complaints. If they were to have announced this three months ago, I would have purchased a Nexus 4 and switched in a heart beat. unfortunately I just signed another two year agreement when I got my galaxy nexus. If they were offering to buy out contracts, I would buy a nexus 4 and switch immediately.

My biggest concern about these contract plans is that the price for the same service will change over time. At least if I sign a 2 year contract with a company, I know that I'm going to keep paying that price for 2 years and any time thereafter until I switch services/carriers.

With a month-to-month plan, what's my guarantee that after 6 months, T-Mobile decides it's not making enough on the family plans and jumps the price by $10 a line?

My biggest concern about these contract plans is that the price for the same service will change over time. At least if I sign a 2 year contract with a company, I know that I'm going to keep paying that price for 2 years and any time thereafter until I switch services/carriers.

With a month-to-month plan, what's my guarantee that after 6 months, T-Mobile decides it's not making enough on the family plans and jumps the price by $10 a line?

I've been using the $60 Unlimited everything month to month plan (2gigs at 4G speeds) for the past two years. I don't know what you're basing that on.

I have T-Mobile, and I am waiting for my contract to expire so I can leave them. I would like to believe that gets me out of this horrible contract the has the worst service I have ever experience next to AT&T. My bill went up to $109 from $93 this last billing cycle. I wonder if this has anything to do with it. I live in what the sales rep calls "A prime spot" for signal, but my data just sucks. I will most likely go back to sprint or metro PCS, who is now part of the T-Mobile crime family.